Partners buy boat insurance agency from Fifth Third
TRAVERSE CITY – You won’t find suits and ties at Global Marine Insurance. Instead, you’ll be greeted by a receptionist with the hail, “Welcome aboard!” and a staff of 20 with the “boating gene.” And, if you catch them at a boat show, they’ll be toting their trademark chocolate chip cookies.
That’s how president and new co-owner Mike Smith describes the marine insurance company he helped launch in 1989 and recently purchased from Fifth Third Bank, with partners Pam Stanley and Matt Anderson.
“This is a really fun business because you work with people who like to talk about their boats,” Smith said. “It’s not like car or home insurance that are necessities. This is insurance for their babies–and they love ’em. We like to say, ‘If it floats, we can insure it.'”
And the “boating gene” is the livelihood of the business. Smith and Stanely began building Global Marine Insurance in 1989 with the help and investment of Bill Anderson, past president and founder of Guyot Hicks Anderson in Traverse City.
“Bill believed in us and invested in us in 1989,” Smith said. “He told us to go build the Global Marine Insurance that exists today.”
But Smith and Stanley took a roundabout way of gaining ownership of the company. They got their start in 1984 with Guba Marine Division before joining forces with Guyot Hicks Anderson in 1989, when Global Marine Insurance was launched. In 1995, Guyot Hicks Anderson, along with Global Marine Insurance, was bought by Old Kent Insurance Group. Last April, Fifth Third Bank bought Old Kent and, in June, Smith and Stanley, along with Matt Anderson, bought Global Marine Insurance from Fifth Third Bank–finally laying ownership to their baby.
“A marine specialty insurance agency wasn’t in Fifth Third Bank’s plans,” Smith said. “So we offered to buy it. The same people who were running it before are running it now. We just aren’t owned by a financial institution any more.”
While Bill Anderson plays a silent part in the business, his son Matt is CFO and marketing manager. Stanley is the vice president of sales, and Smith is president. And the trio is enjoying the front lines.
“We are a very specialized independent agency. We have binding and pricing authority and actually issue the policy,” Smith said. “Most regular insurance agencies don’t have pricing authority, just binding authority.”
The result is fewer state regulations and more personal service and pricing, Smith said. They consider each policy individually, weighing the risk for each person.
“It allows us to operate fast and efficiently,” he said. “It gives us a lot of freedom and underwriting authority. We can be creative. The rules aren’t black and white and it makes a huge difference.”
One of the biggest differences people are surprised with is that the value of a marine policy holds its value over time.
“If your boat is insured for $100,000, then you’ll receive $100,000 in a loss,” he said. “There is no mystery in the value of the policy. People usually have a very satisfying loss experience if they have one. There is no arguing with an adjuster.”
Global Marine Insurance has also developed custom computer software to manage claims with local software developer Kerry Ferguson of Ferguson and Associates. “Kerry is the closest thing to genius I’ve seen,” Smith said. “We took two years to develop it and we have already sold it to one insurance company. We see it as the standard within the marine industry in the next few years.”
The company has special programs for pleasure craft, mega yachts, charter boats, charter fleets, antique and classic wooden runabouts, performance boats and personal watercraft. It’s licensed in all 50 states; about half of their business comes from the Great Lakes states, 40 percent from the East Coast and the rest throughout the country. They have two remote locations, in Connecticut and Florida, the latter being the place where dreams come true, according to Smith.
“We live vicariously through our customers,” he said, noting that it isn’t uncommon to have a boat costing in the millions in Florida.
The company travels to 22 boat shows a year and it’s at those shows that the trademark chocolate chip cookies were born.
“We meet people with cookies in hand,” said Smith, who estimates they take 35 to 40 dozen cookies to every boat show. “They might not want to talk to us but they want those cookies–and those cookies have opened a lot of doors.”
Boat shows along the coast between Fort Lauderdale and Miami are the most remarkable, he said. “They have boats lined up over 80-feet long for as far as the eye can see,” Smith said. “There’s a mile to a mile-and-a-half of mega-yachts. They can’t build them fast enough down there.”
In fact, the industry is so hot there is typically a three-year wait for a custom-built 100-foot boat in Florida by a reputable yard. A yacht that Stanley is currently underwriting illustrates the extraordinary costs. It is a 151-foot, $33 million yacht that travels the world. The insurance premium is a whopping $162,000 a year.
“You have to think outside the Great Lakes box for a boat like that,” Smith said. “They launch boats like that to go around the world.”
Worldwide travel puts boats in danger of hurricanes and ups the premium. In fact, when Hurricane Andrew blew ashore, it knocked seven insurance companies out of business in Florida.
The huge diversity in policies is what Smith likes about his job. “You can be on the phone one minute for a mega-yacht and insuring a jet ski the next,” he said. “You just never know.”
Global Marine can be found online at www.quotemyboat.com. BN